What should you Pay Attention to When Licensing Soundtracks to the Game

When you hear "soundtrack" or "OST," rest assured they refer to the same thing. OST stands for Original Soundtrack — this is the music used in a video game, movie, or other work.

Officially, a soundtrack is music that was created before the creation of the video game and was later used in it. However, we are now observing a trend where this term is used to refer to any music used in video games.

In this article, we will explain how to properly use soundtracks in games.

Using soundtracks requires compliance with copyright laws on musical works. If the music was not created within the company (by its employees), it is necessary to obtain permission from the rights holders to use their compositions in the game content.

You can obtain such permission in two ways:

1.    License

The game developer can enter into an agreement with the rights holder to license (transfer for a certain period of time) his (her) musical work for game content. In this case, the rights holder does not lose his (her) status but only allows to use the musical works to a certain limited extent.

One of the options for such licensing is the use of stock music. If you use music from this source, it is important to understand what type of license is provided and what limitations the stock itself imposes, as this determines the scope of use.

Popular stock platforms include SoundCloud, Pixabay, and Icons8. Each has its own requirements for downloading and using music in commercial projects.

For example, users who upload audio tracks to SoundCloud often distribute material under a Creative Commons license, the terms of which give the right to use it for commercial purposes. Icons8, in turn, requires attribution to the platform for crediting authorship, and using music from Epidemic Sound requires a subscription, which varies depending on the purpose of use: personal, commercial, or corporate.

2.    Assignment

This is the second option for obtaining permission, when developer can purchase the rights to use a particular composition fully and permanently, i.e., to buy the music.

If the developer independently creates soundtracks for his (her) project, this involves either engaging employees within the company or using the services of a music label.

In both cases, to legitimate use of musical works requires either the assignment of the exclusive right to the musical work, or a license. In the case of music labels, license agreements are often concluded for the use of music, and in this case, the label remains the rights holder. When developing within a company, the musical work can be recognized, for example, as a service work, in which case the company becomes the rights holder.

What to Include in the Agreement on the Creation and Use of a Soundtrack?

In the case of engaging a music label to create music for a video game, attention should first be paid to whether the transfer of work results will be carried out through licensing or through an assignment model.

As we see from practice, most often it is about licensing, so when concluding an agreement on the creation and use of a soundtrack, it is important to clarify several points.

1)    Financial Terms: This could be a fixed amount for each minute of created content and, consequently, an additional fee for each minute beyond the agreed norm. 

Sometimes companies may also require a percentage of video game sales. In this case, it is important to determine what this percentage is calculated from (e.g., monthly, yearly, or semi-annual sales, a certain number of copies sold), the reporting process, etc.

2)    Scope of Rights Granted: Typically, the musical material is transferred under a license. To legally place a musical track in a video game, rights are required for the use, reproduction, and performance; sale and distribution of the video game including the music, as well as the transfer of such rights to third parties (publishers); inclusion of music in the game's marketing materials. It is also necessary to specify the territory of use (specific countries, regions, or worldwide) and the term of the license, as well as the type of license (exclusive or non-exclusive).

3)    Sequels: If the development of a sequel to the video game is anticipated and you plan to use the transferred soundtracks, this should be specified in the agreement. In this case, one of two options can be stipulated:

  • When developing a sequel, which is supposed to include existing soundtrack, the parties can enter into an additional agreement for such transfer. In this case, for example, the expected financial terms can be specified in the "main" agreement.
  • Specify in the agreement the conditions for including music in sequels that will be created in the future.

How to Properly Specify the License Term for Music?

Most of the time, music is licensed because authors rarely want to "give" it to game developers. As mentioned earlier, when drafting a licensing agreement, parties must specify the period for which rights to use intellectual property are granted. However, while specifying the term, there may be prerequisites problems that will arise in the future.

Upon expiration of the license term, parties have two options: to renew the license agreement and thus the rights to the musical arrangement of the video game, or to cease using the music. Given that after 5-10 years (the average duration of a license), the financial performance of video games may decrease due to the market being replenished annually with new and unique products, publishers often "sin" by deciding not to renew the agreement, ultimately making the game unavailable.

In such cases, a question arises: why not replace the "banned" music with another, perhaps less expensive one? However, the situation remains the same: firstly, the publisher may no longer wish to invest in an old, possibly less profitable project; secondly, making changes to video games developed many years ago may be technically challenging. Therefore, from the publisher's point of view, the costs of "updating" the video game do not correspond to the actual benefit.

A similar situation occurred in 2019 when the video game Alpha Protocol (developer - Obsidian Entertainment, publisher - SEGA), released in 2010, was withdrawn from sale in 2019. Initially, the publisher announced that the reason for the withdrawal from sale was the expired rights to the video game. However, it later turned out that the rights still "held" by the publisher, and SEGA did not want to change the soundtrack, the rights to which had expired, to another one.

However, in 2024, the video game was returned: digital platform GOG played a crucial role in this return, especially in the "restoration" of the musical component. The platform negotiated with the rights holders of the soundtrack, whose license had expired, for one and a half years and succeeded; now Alpha Protocol is available to users on this platform.

It is worth noting that this problem affected many games, including the Grand Theft Auto series: compositions from GTA: Vice City and GTA: San Andreas were also removed due to the expiration of their license terms. Moreover, GTA: Vice City suffered particularly, "disappearing" from Steam and other stores in 2012. After removing some musical compositions, it was returned.
Of course, the mentioned games are not the only ones affected by this problem. But, above all, attention should be paid to the fact that the source of this problem is one - insufficient term for the musical work and insufficient initiative from the parties to renew the license.

How to prevent a situation where a withdrawal video game just because of one song?

It is important, first of all, to understand how long the game is intended to be actively PR'd and invested in. Some projects are short-term due to their genre and trends, some due to the size of the investment. For such projects, there might not be a need to license music for a period of ten or more years; a standard five-year term may suffice.

It should not be forgotten that any project can suddenly "shoot up" and be relevant many years later. Therefore, we still recommend concluding license agreements for music for a sufficiently long period of time (e.g. 20 years) to avoid possible problems with copyright ownership.

It is also important to understand the intentions of the parties, primarily the developer and publisher. In rare cases, the rights holder of the music will object to an extension of the license fee. Accordingly, if the parties are determined to further incorporate music into the project, contract renewals tend to go smoothly. If the rights holder protests against the extension of the contract, there is an option to replace the "banned" song with another one. Most often problems with such a replacement arise only for quite old projects, but to a greater extent the fact of such a replacement will depend on the willingness of the developer and publisher to invest in these changes.

How to properly "adapt" existing music for a game?

Often, "samples" - small fragments of musical compositions, are used to create soundtracks for video games, on the basis of which an original soundtrack is created. That is, samples serve as the basis for creating new tracks.

However, like any other object, samples also have right holders. And since samples are intended to be the basis for creating music, you can either license or buy the soundtrack from the right holder. In this case, it is important to pay attention to the terms of the contract, especially in terms of the scope of rights granted.

In addition, attention should be paid to the terms of remuneration: some contracts include provisions that the licensee undertakes to pay the licensor a fee each time the audio appears in your project, as well as each time your track is played, for example, on a radio station. Some samples are royalty-free (look for the indication "royalty-free" in the terms), and you have no obligations to the licensor for any payments.

"Base" for special tracks can be not only samples, but also full-fledged songs. For example, in Atomic Heart, Soviet songs were used in a retro arrangement, which led to problems, namely, the blocking of the game trailer due to "copyright infringement" of the song "Music Bound Us".

Despite the fact that the studio acquired the rights to use the song, the problem was in concluding a contract with a third-party organization (National Music Agency), which owned part of the rights to the works of Andrei Lityagin, the author of the song.

Nevertheless, the agency did not own the rights to the song, which caused problems, namely, the unlawful acquisition of the rights to the song from a third party.

Thus, despite the fact that the rights to all other songs were acquired in the correct order, it was with "Music Bound Us" that the studio encountered problems.

This case demonstrates the need to acquire exclusive rights to use music only from right holders.

Conclusion

We recommend paying special attention to the provisions of the license agreement, particularly regarding territory, duration, and scope of rights, provisions on compensation, and specifically the party with whom you plan to enter into the contract. Careful examination of the terms in the music licensing agreement will allow you to be fully informed about the rights and obligations associated with using music in your video game, and avoid potential pitfalls or legal problems in the future.